Designing a Conceptual Framework of Knowledge Management Process in Banks

Abstract

In an era characterized by changing customer requirements, decreasing product life cycles and complex systems and processes, knowledge centric activities are becoming the primary source of sustainable competitive advantage in manufacturing and service organizations. In this regard knowledge is considered as the most important organizational resource. (Penrose 1959) (1) .It is this knowledge which has the capability to generate new knowledge, which can be disseminated to the relevant points of actions and embodied into the systems, processes, products and services. One of the important reasons that organizations have focused on Knowledge Management is because it employs a holistic approach through the acquisition, creation, organizing, sharing and applying of knowledge. The implementation of knowledge management in an organization according to (Shankar and Gupta, 2005) (2) involves the integration of knowledge from the domains of strategy, structure, processes, and technology, thus, making it difficult for the organizations to do so. The literature review suggests that knowledge is essential for organization's profit(Yang &Chen,2007) (3) as it reduces the operating cost, increases the returns to scale and adds value to the organization (Ofek and Sarvary, 2001) (4) but Nonaka (2007) (5) feels that organizations of the 21 st century are far from creating adequate knowledge-based competence necessary for gaining competitive advantage. The difficulty for many organizations stems from the fact that there is a lack of a coherent framework to guide the implementation of Knowledge Management process in organizations' especially as we move away from simple tasks to organization-wide complex problems. In order to understand the circulation of knowledge a simple list of elements and processes is inadequate. There is a need for a holistic framework where all are integrated into a dynamic coherent whole. Thus this paper focuses on identifying a relevant framework for the process of capturing the knowledge flow in Banks and identifying whether different categories of banks score the same or different in terms of the process components of the knowledge management identifying the reasons and thereby suggesting the remedial measures.